China has pledged a loan of $2.35bn for the construction of a railway along the China-Kyrgyzstan-Uzbekistan route, according to Azamat Sakiev, the General Director of the state company Kyrgyz Temir Zholu. This announcement was made during a meeting of the Committee on Transport, Communications, Architecture, and Construction of the Kyrgyz Parliament, as reported by 24.kg.
The total estimated cost of the railway project is $4.7bn. Of this amount, the Joint Project Company (JPC), which includes representatives from Kyrgyzstan, Uzbekistan, and China, will receive half, equating to $2.35bn. Sakiev specified that the Chinese side will provide this half as a loan, while the remaining half will be funded by investments from the involved parties. Kyrgyzstan’s contribution will be approximately $700mn.
The precise terms and interest rates of the Chinese loan are still under negotiation. Discussions are currently being held with two Chinese banks, Ineximbank and the National Bank of China, which are expected to provide the loan on a non-commercial basis.
The establishment of the JPC is based on an agreement between Kyrgyzstan, Uzbekistan, and China. The agreement, submitted for ratification to the Jogorku Kenesh (Parliament) of the Kyrgyz Republic, outlines that China will hold a 51% stake in the joint venture, while Kyrgyzstan and Uzbekistan will each hold 24.5%.
An agreement on the joint implementation of the China-Kyrgyzstan-Uzbekistan railway project was signed by representatives from the three countries in Beijing on June 6. Akylbek Japarov, the head of the Cabinet of Ministers of the Kyrgyz Republic, later confirmed that construction of the railway is slated to begin in August of this year. He also noted that financing issues for the project have been resolved.
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